How to maximize cash back with your credit card

nimito / Shutterstock
Bankrate Logo

Why you can trust Bankrate

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page.

Savvy cardholders should work to maximize their perks and rewards throughout the year. If you’re using one of the best cash back credit cards, it’s important to understand how to get the most out of your cash back rewards. Keep reading to level up your cash back savvy and optimize your rewards strategy.

1. Evaluate your spending and find a card that suits your habits

Before you switch up your credit card spending strategy or consider applying for a new credit card, it’s important to analyze your cash flow. How much money are you spending a month? A year? And what are your biggest spending categories? If you don’t actually spend enough money on a credit card each year to cover a credit card’s annual fee, that card might not be the best for you.

Once you’ve identified how you’re using your credit card, you can identify which type of card will yield the most rewards for you. These are a few suggestions for credit cards that may suit the needs of those who tend to use their credit cards for everyday expenses, dining out, gas and groceries.

Best cash back cards for everyday spending

The best type of card for everyday spending is generally a flat rate cash back card as you’ll earn the same rewards rate no matter what you buy. While 2 percent cash back makes a lot of sense, a card with a slightly lower flat rate may offer additional perks that make it a better fit for your spending.

Best cash back cards for dining

Whether you’re dining in at a restaurant or picking up takeout, there are a number of cards with generous cash back rewards on dining and entertainment purchases.

  • Capital One Savor Cash Rewards Credit Card: Earn 4 percent on dining and entertainment plus popular streaming services, 3 percent at grocery stores and 1 percent on everything else.
  • Chase Freedom Unlimited: Earn 5 percent cash back on grocery store purchases (not including Target or Walmart purchases) on up to $12,000 spent in the first year; 5 percent cash back on Lyft purchases (through March 2022); 5 percent cash back on travel purchased through Chase Ultimate Rewards; 3 percent cash back on dining; 3 percent cash back on drugstore purchases and 1.5 percent cash back on everything else.
  • Capital One SavorOne Cash Rewards Credit Card: Earn 3 percent on dining, entertainment, popular streaming services and grocery store purchases (additional terms and exclusions apply); 8 percent cash back on purchases from Vivid Seats (until January 2023) and 1 percent on everything else.

Best cash back cards for gas and groceries

If your biggest spending is on food or gas you may be best served by one of the best cards for groceries or a card focused on gas rewards.

  • Blue Cash Preferred® Card from American Express: Earn 6 percent cash back on U.S. supermarket purchases (up to $6,000 per year, then 1 percent); 6 percent back on select U.S. streaming subscriptions; 3 percent cash back on transit; 3 percent back on U.S. gas station purchases and 1 percent back on all other purchases ($0 introductory annual fee for the first year, then $95).
  • Blue Cash Everyday® Card from American Express: Earn 3 percent cash back at U.S. supermarkets (up to $6,000 per year, then 1 percent); 2 percent cash back at U.S. gas stations and select U.S. department stores and 1 percent cash back on everything else ($0 annual fee).

2. Choose a card with a solid sign-up offer

If you’re in the market to apply for a new cash back card, do your homework to make sure you’re selecting the best cash back card with a solid sign-up offer and a minimum spending requirement that you’ll easily be able to meet.

There are plenty of cash back cards with great welcome bonuses, including:

3. Create a card strategy that works for your spending

There are a few steps you can take to make sure you’re getting the most out of each of your credit cards.

To start, you shouldn’t play favorites with your cash back cards. It’s smart to not focus all of your cash back earning on a single credit card. While it’s great that you’re earning a high percentage of cash back for your supermarket shopping with the Blue Cash Preferred, you don’t need to settle with just 1 percent cash back on most other purchases. Keep a second card in your wallet, like a 2 percent flat-rate cash back card that you can use for your spending that doesn’t qualify for a higher-earning bonus category.

Do some research on all of your different cards and identify what each card is best for. Add a small label to your card as a reminder of what to use it for, give each card a helpful nickname in your digital wallet or slip a hand-written legend into your wallet so you’re prepared to use the right card at the right moment.

If your cash back card has rotating bonus categories, keep an eye on your issuer’s cash back calendar and activate bonus categories each quarter. This way you’ll be eligible for the bonus cash back rate. Otherwise, you’ll only earn the base rate, usually 1 percent on all your spending.

4. Make the most of special offers and shopping portals

If you want to earn more cash back, combine your favorite cash back credit card with a handy shopping portal. You can often earn more rewards on every online purchase you make by clicking through a shopping portal for your favorite store, then paying with your favorite cash back card. Cash back apps and sites like Ibotta, Rakuten (formerly Ebates) and Dosh give you a percentage of your spending back on qualifying purchases—on top of the cash back you’re earning on your credit card.

Before you shop—whether in-person or online—look out for card-linked offers from your credit card issuer. Stay up to date on any additional rolling bonus offers your card issuer has for the cash back card you carry. These offers are normally found in your online account, have limited redemption windows and need to be opted into individually.

You can also check out our guide to credit card special offers and limited-time promotions regarding additional perks and benefits for your credit card and rewards. Card-linked offers and special promotions are ever-changing, so it’s a good idea to check regularly for updates.

5. Use your cash back wisely

Using your cash back rewards wisely is just as important as maximizing your cash back earning opportunities. Many people choose to use their cash back rewards as statement credits to offset their monthly spending, but getting a rebate on money already spent isn’t the only option. Pay yourself forward with your cash rewards by saving up for a big purchase you might not otherwise buy, or invest your returns each month and let your cash back pay you longer-term dividends for the future.

The bottom line

If you take a little time to spend strategically, you’ll be raking in cash back rewards before you know it. You can maximize your cash rewards by using the right cash back card for as many of your everyday purchases as possible.

In the meantime, you’ll also want to avoid carrying a balance so you won’t have to pay interest on your purchases. With the average credit card APR currently over 16 percent, racking up rewards won’t make any sense if you also rack up long-term debt.